Bidding War Over Newsday?

Now suddenly everyone is interested in Newsday. The New York Times is reporting that a Manhattan media blockbuster trio is “in discussions” to buy the Melville-based newspaper: Rupert Murdoch, James Dolan and Mort Zuckerman. Sam Zell decides who’s the winner.

It sets up a satisfying auction between Mr. Murdoch (Post-owner) and Mr. Zuckerman (Daily News-owner) and Mr. Dolan, who owns MSG, the Knicks, Rangers and Cablevision.

The newspaper analyst John Morton told the Times the paper is worth between about $350 million and $400 million and is one of the Tribune Company’s most lucrative properites. Crain’s reported first yesterday that Mr. Murdoch was interested in Newsday (a fact that the Times reduced to a parenthetical in their story).

Mr. Murdoch is interested in setting up a partnership between the Post and Newsday; Mr. Dolan is interested in buying the paper outright.